It’s becoming increasingly obvious that customers’ expectations are changing—and a better experience is what they’re coming to expect. Simply becoming efficient in completing a transaction is no longer the optimal result—a fact driven home by Lior Arussy, president of customer experience consultancy Strativity Group, during the opening keynote at CRM magazine’s destinationCRM 2008 conference in late August. “When dealing with the new customer, [who is] pushing and extending and wants a new emotional connection, don’t go for superficial shortcuts,” Arussy said. “It’s not going to cut it.”

Similarly, at Gartner’s CRM conference in mid-September, Gartner analyst Ed Thompson declared that companies are now using the customer experience as a competitive differentiator—but that the term experience means different things to different people. “I recommend you focus on interactions, intelligence, and recognition of the customer in the handling of multiple events,” he said.

And as the leading companies continue to transition from product centricity to process centricity to customer centricity, Gartner analyst Adam Sarner warned that another transition is looming. By 2015, he suggested, organizations will be persona-centric—embodied by what Gartner is referring to as Generational Virtual (or “Gen V,” for short).

“The idea of Generation X, and later Generation Y, was…a way to understand and generalize new generations that appeared not to have connections to the cultural icons of the Baby Boomers,” Sarner explained to the audience. “Marketers use the idea of ‘Baby Boomers,’ ‘Generation X,’ and ‘Generation Y’ as a way of segmenting the population for targeting products and services. However, as more Baby Boomers—who are living longer—and the younger generations go online and participate and communicate in a flat virtual environment, the generational distinctions break down. Customers will hop across segments at various times of life for various reasons, and are likely to act like several generations at any given time.”

So how should companies respond to these virtual customers, who identify themselves with avatars, screen names, and SecondLife identities? Sarner’s advice was simple: Provide multiple experiences and multichannel management. Gen V will expect multiple paths for exploration and access to products and services. Sarner also noted that there will be a gradual shift toward psychographic data over demographic data. “Knowing a customer’s name isn’t as important as knowing [her] buying habits—or [her] intent,” he said. He even recommended an investment in skilled anthropological knowledge workers to understand the virtual customer’s intent.

According to Gartner, by 2015, more time will be spent online using a combination of communication tools than the total time spent reading magazines and newspapers, watching TV, and listening to the radio. In preparation for that reality, Sarner said it’s important that marketers and retailers start to recognize online personas. “In this new world, where every customer has easy access to stand on a virtual soapbox in a massive virtual public square, companies must take notice and engage—or face the wrath of ‘virtual mobs’ and mass customer exodus,” he told attendees. “Discovering customers’ true identities will be irrelevant.”

What does this mean for the data-analysis solutions that are currently being purchased to analyze each customer’s identity? Sarner hinted that there will still be a place for such solutions in the future, but their purpose will have been tweaked. “Multibillion-dollar third-party customer-data providers, [business intelligence], and the analytic markets will shift toward consumer applications, eventually arming customers with automated, artificially intelligent self-learning ‘persona bots’ seeking customers’ needs and wants 24/7.”

Companies, he added, will need new skills and techniques to engage and remain relevant for the virtual age.

Several of the stories in this month’s Insight refer to information and presentations from our recent destinationCRM 2008 conference. For more of our coverage from the show, please visit http://snurl.com/dCRM08.

Gartner CRM Summit '08: Key takeaways include building upon the customer experience and embracing social trends; 90 percent of attendees report CRM budgets have either remained the same or increased over the past year.